"These were innocent people going about their lives and they have been wantonly killed by Russian-backed rebels, quite possibly, maybe probably using Russian-supplied equipment," Mr Abbott said.

The idea that Russia can somehow say that none of this has anything to do with them because it happened in Ukrainian airspace, frankly does not stand up to any serious scrutiny.

Australian Prime Minister Tony Abbott

"It really is a test for Russia ... how transparent and fair dinkum is it going to be," Mr Abbott said. "There can be no excuses, no buck-passing, no blame-shifting."

However, during a meeting with Foreign Minister Julie Bishop, Russian ambassador Vladimir Morozov denied pro-Russian separatists were responsible for the downing of MH17.

The Prime Minister says the ambassador blamed Ukraine.

"I have to say that is deeply, deeply unsatisfactory," Mr Abbott said.

Mr Abbott has spoken to his Dutch and New Zealand counterparts and was to speak with the Malaysian prime minister.

He has not spoken to Russian president Vladimir Putin, but says Russia must be more forthcoming.

"We all know that there are problems in Ukraine. We also know who is very substantially to blame for those problems," Mr Abbott said.

Nationalities of MH17 passengers

Netherlands: 189*

Malaysia: 44 (including 15 crew)

Australia: 28**

Indonesia: 12 (including 1 infant)

UK: 9

Germany: 4

Belgium: 4

Philippines: 3

Canada: 1

New Zealand: 1

Unverified: 3

*N.B. One victim was a dual US citizen**N.B. DFAT says 28 Australians were on board; Malaysia Airlines says 27 Australians were on board

Source: Malaysia Airlines

"The idea that Russia can somehow say that none of this has anything to do with them because it happened in Ukrainian airspace frankly does not stand up to any serious scrutiny."

During a late-afternoon press conference at Parliament House, Mr Abbott repeated his call for a full, independent international inquiry into the tragedy.

"When you have a situation where Russian-backed rebels appear to have killed Australians using, it may well turn out to be Russian-supplied heavy weaponry, Australia takes a very dim view indeed and we want the fullest possible investigation."

Flight MH17 was en route from Amsterdam to Kuala Lumpur when it came down in rebel-held territory near Ukraine's border with Russia.

The Prime Minister said it was no accident.

"It was shot down. It did not crash. It was downed, and it was downed over territory controlled by Russian-backed rebels. It was downed by a missile which seems to have been launched by Russian-backed rebels."

Questions over Putin's attendance at G20 summit

The Prime Minister says Russia must not get in the way of a MH17 inquiry.

But Mr Abbott will not say if Mr Putin will be welcome at November's G20 summit in Brisbane if he does not assist.

"I don't want to pre-empt what might happen in the weeks and months ahead. I just want to say that it is absolutely imperative if Russia is to maintain any international standing at all that there be complete Russian cooperation with this," he said.

"No provocation, no excuses, no blame-shifting, no protecting of people who may be backed by Russia but who may have been involved in this terrible event."

He said Australia would be reluctant to act unilaterally on Russia as the G20 was an important international gathering.

"I expect the international community to take appropriate steps to ensure that this kind of thing never happens again and that the perpetrators of this outrage are suitably punished, suitably brought to justice."